ALBACOM/EXECUTIVE SERVICE (Start of full phase investigation)
PRESS RELEASE
The Italian Competition Authority initiated a proceeding against Telecom Italia, in order to investigate an alleged violation of Section 3 of Law no. 287/90 (abuses). In fact, Telecom offers discounts on the public telephony to its own customers who use liberalized services, and refuses to extend the same discounts to customers served by rivals working in the liberalized market. Discounts given by Telecom within its "Executive" offer involve up to 30 percent off on the telephone call traffic managed by the commuted public network (both domestic and international), depending on the volumes of telephone calls originated by virtual private network users.
Albacom (a joint-venture created by British Telecommunications and BNL, who owns and runs a data transmission private network in Italy) asked the public carrier for the possibility to charge its closed user groups the reduced rates. Telecom did not allow the company to offer the same discounts and, as such, Albacom filed a complaint with the Authority.
However, the virtual private network service supplied by Telecom and the telephony service for closed user groups provided by rivals seem to have the same characteristics to all intents and purposes. Indeed, both of them fall within the services liberalized by EEC Directives. Therefore, service providers have to enjoy as the same conditions as the single carrier.
By contrast, discounts offered by Telecom have the effect to induce customers to choose the competitive service supplied by the monopolist, instead of the service provided by competitors. Only in this way, in fact, customers can enjoy the advantageous rates of local, domestic and international long-distance calls managed in a monopoly regime by Telecom. This conduct could impede other operators to enter the liberalized market of the hi-tech telephony service and, as such, could constitute an abuse of dominant position.